China semiconductors: SMIC cements its role as Beijing’s best hope in chips despite US restrictions
- The chip maker reported a record-high 27.5 billion yuan (US$4.2 billion) in revenue for 2020, representing 24.8 year-on-year growth
- SMIC’s more mature nodes are still in high demand for applications from cars to consumer electronics amid a chip shortage caused by the pandemic
Shanghai-based contract chip maker Semiconductor Manufacturing International Corp (SMIC), helped by two former semiconductor veterans from Taiwan, has cemented its status as Beijing’s best hope to catch up with global peers in semiconductor manufacturing despite US restrictions barring it from buying the most advanced chipmaking equipment and technologies.
The world’s fourth-largest foundry on Wednesday published its audited 2020 financial results, confirming strong top-line and bottom-line growth last year and marking a rebound from 2018 and 2019, when investment in expanding production capacity and R&D led to consecutive losses.
The company reported a record-high 27.5 billion yuan (US$4.2 billion) in revenue for 2020, representing 24.8 per cent year-on-year growth. Net profit grew a hefty 217 per cent to reach 4 billion yuan due to brisk chip demand last year.
“SMIC will still play a crucial role in advancing China’s chipmaking technology going forward,” said Arisa Liu, research fellow at the Taiwan Institute of Economic Research.
Both China and the US are doubling down on investments in their domestic hi-tech industries, especially in semiconductors, amid the world’s growing dependence over the past decade on Taiwan, home to the world’s leading foundry Taiwan Semiconductor Manufacturing Company (TSMC).
As the Chinese government encourages investment in chip manufacturing, with many local governments showering preferential treatment on their own chip projects, SMIC remains the leading player in terms of technology, output and talent.